It is imperative that Canadians have access to transportation on a daily basis. Canadians can choose between a variety of transportation options, or they might have only a few options, depending on where they live. If you choose to travel by public transportation or by private vehicle, you will have to weigh your options carefully. Here, we’ll talk about how to buy or lease a car in Canada. Immigrants to Canada will make several major financial decisions, including purchasing an automobile. It is important to be aware of your options, regardless of whether you decide to purchase or lease a vehicle.
Car leasing or buying: What’s better?
Leasing and purchasing are your main choices for purchasing a vehicle after moving to Canada:
- Buying a car involves either paying cash or getting a loan. Once these are paid off, you own the vehicle outright.
- Your lease agreement specifies the amount you will pay each month for the duration of the lease, and then the vehicle will be returned when it ends.
Ways to Buy a Car in Canada
Whether it’s a new or used vehicle, you can acquire it directly from a seller or from a dealership. Furthermore, auto dealerships offer a large selection of automobiles to test drive at one location, as well as the option to add extra features to your purchase, such as extended warranties.
You can often find a lower price when you buy from a private seller. Individual online sellers may misrepresent their goods, so be careful when dealing with them. Obtain a reliable estimate of the vehicle’s value before putting any money down. Buying and selling cars has different rules in every province and territory, so check with your local authority before buying or selling:
| Province | Authority for Vehicle Transportation |
| Alberta | Service Alberta or Alberta Transportation |
| Manitoba | Manitoba Public Insurance |
| Saskatchewan | Saskatchewan Government Insurance (SGI) |
| British Columbia | Insurance Corporation of British Columbia (ICBC) |
| Quebec | Quebec Automobile Insurance Corporation |
| Nova Scotia | Service Nova Scotia |
| Ontario | Ontario Ministry of Transportation |
| New Brunswick | New Brunswick Department of Public Safety |
| Newfoundland and Labrador | Service NL |
| Prince Edward Island | Prince Edward Island Department of Transportation and Public Works |
| Yukon | Government of Yukon’s Motor Vehicle Branch |
| Northwest Territories | Northwest Territories Department of Transportation |
| Nunavut | Nunavut’s Department of Economic Development and Transportation |
How to finance your car purchase
Buying a car in cash may not be possible for many people. Your bank may offer you a vehicle loan to help you finance your auto purchase. Car loans can be paid off with monthly payments, and once you pay off the loan, the vehicle is yours.
Advantages of purchasing a car in Canada
- Gain in the long run: Having a car for a long time increases its value over time.
- Asset: You can sell your car at any time once you’ve paid off your car loan. Over time, the value of cars depreciates.
- Flexibility: Vehicle replacement is a decision you have to make for yourself.
- Selling power: The market price for your car can be sold to anyone.
- No restrictions: When you own a car, you do not have to adhere to any kilometer restrictions or repair standards, but regular maintenance is strongly recommended.
Ways to lease a car in Canada
Frequent drivers may also consider leasing an automobile. Essentially, leasing is like renting a car for the long run rather than owning one. If you decide to lease an automobile from a dealership, you will be responsible for its maintenance and care for the entire lease term. Leasing a car usually lasts three or four years. You must pay your lease payments every month. Leases are legal contracts that can be difficult to break before the end of the term.
With leasing, you don’t have to wait until your old vehicle is beyond repair before upgrading it. It is likely that you can purchase your automobile for the price outlined in your lease contract at the end of your lease term if you decide you like driving it.
Leasing a car also has the following advantages:
- It’s not your responsibility to sell the car once you’re done driving it. The dealership receives the car immediately.
- Leasing is often more affordable than financing an automobile. Purchasing a car and spreading the cost over many years is cheaper in the long run than leasing.
- In addition to the lease price, other costs are already included, such as freight, administrative fees, and more.
Despite the fact you are not technically the owner of the leased vehicle, you must maintain it to return it in excellent condition at the end of the lease. Typically, lease agreements stipulate mileage limits on the vehicle and maintenance schedules. When you’re confident that you’ll be able to maintain a car, and you’re willing to commit to three or four years, leasing could be right for you.
Licensing and insurance after you purchase or lease your car
Canadian driver’s license – How to get it?
Driving a car in Canada requires a driver’s license. Other international driver’s licenses require knowledge and driving tests, while some can be translated without further examination. A vehicle’s steering wheel is mounted on the left side of the vehicle in Canada, and the vehicles follow left-hand drive and RHT (right-hand traffic) driving directions. After getting your license converted and if you aren’t used to driving left-handed, it might be beneficial to take a few classes for some practice driving right-handed.
Car insurance in Canada – How does it work?
Having auto insurance is a requirement for lawful driving in Canada. Car insurance typically comes in the following forms:
- Liability insurance is important for all motor vehicles in Canada. The liability insurance you carry will assist you in paying for any damage you cause to another person’s body, vehicle, or property if you are found to be at fault in an accident.
- If your car is damaged, collision coverage will provide you with financial assistance.
- The third type of insurance drivers often acquires comprehensive coverage, which protects them against non-operational losses (e.g. if they get their car locked, broken into, damaged by the weather, etc.). A person’s car insurance price usually varies based on their location, their age, their driving history, their vehicle, and how often they use it.
Insurance providers may charge different prices. Several insurance companies should be contacted in order to get the best price. ICBC, the auto insurance monopoly in British Columbia, has public-run insurance programs in some jurisdictions. Your insurance paperwork will be sent to you as soon as you purchase it. You should always keep your driver’s license and proof of auto insurance with you while driving.
Vehicle registration
The provincial transport or service department will register your car after you obtain auto insurance. A license plate and sticker are available as soon as you register your car. Your vehicle can be registered by certain dealerships at the time of purchase.
Provinces have different rules regarding license plates, so some plates will look different. During the process of getting your license plates, check with the provincial transport authority about the regulations as some provinces don’t require a front and rear license plate.
Keep in mind the additional costs of driving
Automobile and insurance fees are only the beginning of the expenses associated with driving a car. There are numerous costs associated with fuel, whether it be gas or electricity, parking, maintenance, and car accessories. Keeping track of your spending and saving money for unforeseen car expenses is easy when you use our monthly expense calculator.
Car maintenance cost
Car maintenance costs can appear at any time, especially when you are 100 kilometers from home. Detailed maintenance guidelines are included in every vehicle’s owner’s manual, which explains when routine maintenance should be performed. Preventing bigger automotive problems can be accomplished by addressing tiny issues early on. At least twice a year, your vehicle should have an oil change and fluid check.
Keeping an eye on your tires
If you want to avoid flat tires and be as safe on the road as possible, you should keep your tires constantly checked and inspected before long journeys. It is possible to increase your tires’ lifespan by rotating them so they wear evenly. Additional charges apply for tire rim installation.
During the winter, icy roads, heavy snowfall, and winter tires are all necessities in Canada. Despite the cost of winter tires, they extend the life of your summer tires and can be purchased for $100 to $200 CAD each. A winter tire’s rubber doesn’t compress when it gets cold, which improves its grip. In order to avoid being caught off guard by a snow or ice storm without the appropriate tires, convert to winter tires once temperatures fall below seven degrees Celsius. You may be fined if you don’t use winter tires or tire chains when driving in hazardous regions.
Fuel cost
Canadian automobiles typically use unleaded fuel. Plan your budget, accordingly, keeping in mind that petrol prices can change according to the time of year and demand. Some Canadian vehicles also use diesel fuel.
Canada is becoming more popular with electric automobiles as they become cheaper and more environmentally friendly. It varies from province to province how much it costs to charge an electric car. People who decide to purchase an electric vehicle can receive a financial incentive from the Canadian government in order to reduce greenhouse gas emissions.
Parking cost
Once you arrive at your destination, you must find a parking spot. Where you live can determine how expensive parking can be in busy neighborhoods. It is not unusual for parking fees to exceed $200 CDN in cities like Calgary, Vancouver, and Toronto. Car ownership becomes significantly more expensive when parking tickets are added in.
It is common for people to pay for parking from their phones in several of Canada’s larger cities. Pay-for-parking apps can be found at parking meters across the country.
Car accessories cost
It’s possible to install Bluetooth cell phone hookups, bike racks, and ski boxes for your weekend road trip, but the installation fees can be steep, as well as the cost of the accessories. To save time and money, request that some of these extras be incorporated into your vehicle at the dealership if you want to buy one.
Leases or purchases of cars are huge financial investments for immigrants. Make sure you do your homework and speak with a financial adviser before you apply for car financing. Depending on your needs, they can help you determine whether leasing or buying is best for you, and they can refer you to dealerships where you can get a car loan or lease that meets your needs. This post seeks to provide you with the information and tools necessary to buy or lease a vehicle in Canada.
